Gold may gain as concern about Europe’s debt crisis and faster inflation spur demand for the metal as an alternative investment, a survey found.
Twelve of 19 traders, investors and analysts surveyed by Bloomberg, or 63 percent, said bullion will rise next week. Three predicted lower prices and four were neutral. Gold for June delivery was down 0.3 percent for this week at $1,488.60 an ounce by 11:02 a.m. yesterday on the Comex in New York. It reached a record of $1,577.40 on May 2.
Gold demand gained 11 percent to 981.3 metric tons in the first quarter as China helped boost investment and jewelry purchases, the World Gold Council said yesterday. European Central Bank officials this week ruled out a Greek debt restructuring, clashing with political leaders over a solution to the crisis.
“The medium- and long-term trend remains bullish due to continuing strong investment demand,” said Mark O’Byrne, executive director of brokerage GoldCore Ltd. in Dublin. “People continue to buy gold due to the uncertain outlook due to the sovereign debt crisis in the euro zone, deepening inflation and the uncertain geopolitical outlook in north Africa and the Middle East.”
The attached chart tracks the results of the Bloomberg survey, with the red bars derived by subtracting bearish forecasts from bullish estimates. Readings below zero signal that most respondents expect a decline. The green line shows the gold price. The data are as of May 13.
The weekly gold survey, which started about seven years ago, has forecast prices accurately in 208 of 363 weeks, or 57 percent of the time.
This week’s survey results: Bullish: 12 Bearish: 3 Neutral: 4